Saudi Arabian Labour Market Data Outlines the Challenges of Reform

Saudi Arabia’s Council of Ministers approved an ambitious National Transformation Programme (NTP) in June 2016 with the aim of carrying out a complete restructuring of the economy. The implementation of Vision 2030 has major implications for the structure of Saudi Arabia’s labour market with the creation of 1.2 million non-oil private sector jobs, most of which are expected to be taken up by citizens. Official data shows the labour market has a number of distinctive features which will challenge the implementation of Vision 2030: an overreliance on expatriate labour; a preference by nationals for public sector jobs; a gender imbalance; persisting structural unemployment and problems in balancing labour supply and demand. The government is attempting to change the operation and structure of the labour market by a set of policies involving quotas, subsidies, taxes, penalties and the provision of information services, but for a number of reasons change is unlikely to proceed smoothly in the next few years.